Level 3 distributors have their own EPA sub regist
Post# of 1425
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Posted On: 08/27/2020 12:16:19 AM
Level 3 distributors have their own EPA sub registration for their product. We do not know details, but we do know what is said in the filings, here is a relevant quote-
Quote:
The Company has the following three revenue streams:
1) Product sales (equipment and/or fluid solutions): Contracts for product sales consist of invoices specify the transaction price. The only performance commitment is the provision of products and the transaction price is allocated to the products specified on the invoice. The Company recognizes revenue from the sale of products when the performance obligation is satisfied by transferring control of the product to a customer.
2) Licensing: The Company licenses a contract-based use of the Company’s US EPA Product Registration, returning revenue in licensing fees and/or royalties from minimum or actual fluid sales. The Contract specifies the term, fees and or royalty. Performance obligations include the provision of a sub registration to use the US EPA Product Registration and or the provision of a license to use the product for a period of time. The Company allocates the transaction price based on the relative standalone selling price of each performance obligation. The Company’s licenses provide a right to use and create performance obligations satisfied at a point in time. The Company recognizes revenue from licenses when the performance obligation is satisfied through the transfer of the license. For licenses that include royalties the Company will recognize royalty revenue as the underlying sales or usages occur, as long as this approach does not result in the acceleration of revenue ahead of the entity’s performance.
3) Equipment leases: Contracts for equipment leases are systems service agreements, usually 3-year contracts for the provision of the Company’s equipment and service of such, under contract to customers, with renewable terms. The performance obligation consists of the provision of with leased equipment The Company recognizes revenue from the leasing of equipment as the entity provides the equipment and the customer simultaneously receives and consumes the benefits through the use of the equipment. This revenue generating activity would meet the criteria for a performance obligation satisfied over time. As a result, the Company recognizes revenue over time by using the output method, as the Company can measure progress of the performance obligation using the time elapsed under each obligation.
So from that information, we can surmise that level 3 distributors should be paying licensing fees and/or royalties on a minimum amount or actual fluid sales - whichever is higher. The amount would be in the contract and we do not have those details. But this number will add up as the list grows and each of them get up to full production.
Quote:
The Company has the following three revenue streams:
1) Product sales (equipment and/or fluid solutions): Contracts for product sales consist of invoices specify the transaction price. The only performance commitment is the provision of products and the transaction price is allocated to the products specified on the invoice. The Company recognizes revenue from the sale of products when the performance obligation is satisfied by transferring control of the product to a customer.
2) Licensing: The Company licenses a contract-based use of the Company’s US EPA Product Registration, returning revenue in licensing fees and/or royalties from minimum or actual fluid sales. The Contract specifies the term, fees and or royalty. Performance obligations include the provision of a sub registration to use the US EPA Product Registration and or the provision of a license to use the product for a period of time. The Company allocates the transaction price based on the relative standalone selling price of each performance obligation. The Company’s licenses provide a right to use and create performance obligations satisfied at a point in time. The Company recognizes revenue from licenses when the performance obligation is satisfied through the transfer of the license. For licenses that include royalties the Company will recognize royalty revenue as the underlying sales or usages occur, as long as this approach does not result in the acceleration of revenue ahead of the entity’s performance.
3) Equipment leases: Contracts for equipment leases are systems service agreements, usually 3-year contracts for the provision of the Company’s equipment and service of such, under contract to customers, with renewable terms. The performance obligation consists of the provision of with leased equipment The Company recognizes revenue from the leasing of equipment as the entity provides the equipment and the customer simultaneously receives and consumes the benefits through the use of the equipment. This revenue generating activity would meet the criteria for a performance obligation satisfied over time. As a result, the Company recognizes revenue over time by using the output method, as the Company can measure progress of the performance obligation using the time elapsed under each obligation.
So from that information, we can surmise that level 3 distributors should be paying licensing fees and/or royalties on a minimum amount or actual fluid sales - whichever is higher. The amount would be in the contract and we do not have those details. But this number will add up as the list grows and each of them get up to full production.
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My comments are only my opinion and are not to be used for investment advice.
Please conduct your own due diligence before choosing to buy or sell any stock.